According to an article published today on the Wall Street Journal,"While it’s true Chinese demand for commodities has slowed, as its economy cools, a new report by Wood Mackenzie points out that China will continue to underpin solid demand for base metals for years to come.
The international commodities consultancy reminds us that China’s demand for base metals – aluminum, copper, lead, nickel and zinc – is still growing at 5% to 8% per year".
"That’s slower than double-digit expansion between 2008 and 2013 – the go-go years for China’s economy. “However, it’s important to note that in absolute tonnage terms we still see significant numbers,” said Helen Matthews, head of base metals research at the consultancy".
"Prices for copper already have begun recovering, rising 9.3% from a trough in June. They were helped higher by Chinese imports in September, which last month were at their highest level in more than a year.
Prices for iron ore – which is used in the production of steel – also are up 22% since a low in May on record Chinese imports last month to feed demand from steel makers".
"China’s government has been boosting spending on infrastructure to help juice the local economy, which slowed rapidly earlier this year. The economy grew 7.8% on year in the third quarter, above 7.5% in the previous quarter, the government said Friday. The data also showed domestic steel and base metal production grew strongly".
“The outlook for Chinese base metals is slower not lower,” the report said.
